Good day, ladies and gentlemen and welcome to Accuray introduction of the new CEO conference call. My name is Delue, and I will be your operator today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session toward the end of this conference. (Operator Instructions) As a reminder ladies and gentlemen, this call is being recorded for replay purposes.

I will now turn the call over to Mr. Thomas Rathjen, Vice President of Investor Relations. Please proceed, sir.

Thomas Rathjen

Thank you, Delue. Good morning and thank you for joining us on this morning's conference call to introduce Josh Levine, our new President and Chief Executive Officer. Joining us this morning along with Josh are Lou Levine, Accuray's Chairman of the Board and Derek Bertocci, Accuray's Senior Vice President and Chief Financial Officer.

Before we begin, I need to remind you that statements made on this conference call that are not statements of historical fact are forward looking statements and are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements made on this call relate, but are not limited to significance and timing of product launches, management/leadership capabilities, the company's next stage of growth and next level of commercial success, and the company's leadership position in radiation oncology innovation. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including risks detailed from time to time under the heading Risk Factors in the company's report on Form 10-K filed on September 10, 2012.

And now, I would like to turn the call over to our President and Chief Executive Officer, Josh Levine. Josh?

Joshua Levine

Thank you, Tom. I would like to thank all our investors and analysts for taking time to join us for this call. First, let me say how pleased I am to join Accuray today and look forward to helping the company to realize its goals in the future. Based on my reviews to date, I believe the new CyberKnife and TomoTherapy advanced technology platforms to be introduced at ASTRO will be exciting to our customers.

We also expect these new platforms will be key to the company's future revenue growth. I look forward to meeting investors and analysts at Accuray's investor presentation at ASTRO on Monday, October 29. At that meeting, we will present these new technology platforms, describe their new features and benefits and will answer your questions. At ASTRO and beyond, I expect we are closer with our customers around to help bring the benefits of Accuray's technologies to benefit patients.

Finally, I wish to acknowledge my appreciation for the support our investors and look forward to an ongoing dialogue with you as I work to help Accuray grow revenue and return to profitability. I will now be happy to take your questions.

Question-and-Answer Session

Operator

(Operator Instructions) We do have a question from the line of Mr. Charles Wilson. Please go ahead, sir.

Charles Wilson - Goldman Sachs

So I just wanted a quick question on here. Can you explain is there going to be a difference on the strategy going forward from Euan or are we pretty much going on the same path here? Can you give a little bit more detail on that?

Joshua Levine

Charles, it’s a good question and the truth is, I am about 90 minutes into my experience in the job with the company and probably at this point it's probably inappropriate to a grand pontification, if you will, about what we will or won't do, going forward. I will tell you what I am going to be focused on and what people are going to be focused on here in the company over the course of the next several weeks.

That is really 100% all hands on deck focus on ensuring launch excellence of the technology platforms we are launching at ASTRO. They are important to the company's future. We are really excited about them and the very best thing we can do for our company and the market is to ensure the success of those launches as they roll out in Boston.

So, again, that’s going to be my focus and the company's focus going forward, at least in the near term. Obviously, I have a lot of work to do to come up to speed. I think that as I have described to my colleagues here, I am going to be on an accelerated learning curve in terms of learning the business and understanding the strategic issues but I think if you look at my background in commercial business operations and being the key customer champion in some of the other jobs and businesses that I have managed over time, I think I am going to predict that I will be up to speed in a reasonably short time line and I am looking forward to getting there and I am looking forward to getting out in the market place and competing.

So just by way of focus for myself and what I am going in the next three or four weeks, whatever it is, six weeks, that’s really the focus.

Charles Wilson - Goldman Sachs

Okay, that’s helpful and then just one last one here, then. I guess Euan is going to be remaining on as a consulting role. Is that correct?

Joshua Levine

Yes, I believe so.

Charles Wilson - Goldman Sachs

Okay, that’s helpful. Then I will just get back in the queue.

Joshua Levine

Charles, just let me clarify that. It’s expected, its not, at this point I can't answer definitively whether that will or won't happen but I think that that’s the expectation.

Charles Wilson - Goldman Sachs

Okay, all right, thank you.

Joshua Levine

Okay.

Operator

Thank you. The next question comes from the line of Tycho Peterson. Please go ahead.

Joshua Levine

Tycho, are you there?

Operator

Please un-mute your phone and go ahead, sir. Thank you. We will move to the next question. It's from the lien of Raj Denhoy. Please go ahead.

Raj Denhoy - Jefferies & Company

I wondered if I could ask a bit about the timing. I think, in particular, given the excitement around the launch is coming at the end of the month, there is bound to be questions in terms of why the change so close to that. Is there anything you can comment on that?

Joshua Levine

Yes, very simply put, these technologies are really some of the most advanced and innovative things that we have done in quite some time. I think that as the press release indicated this morning, it was the board's view that in the context of the business' evolution it was time to look for somebody with a more experienced commercial skill set in the context of driving growth and profitability and taking the company to the next phase of its life cycle.

It seems really line up with the timing being ahead of the ASTRO meeting in order to achieve that. So, again, it was an opportunity for me to get my feet on the ground with as much runway if you want to describe it that way in advance with ASTRO as possible.

Raj Denhoy - Jefferies & Company

In that context, has this been something that’s been in the works for some time? I will tell you the genesis of the question. It does sound like you are coming in a little bit perhaps flat footed here in terms of your views of the industry and things and I am curious if this was something that happened recently or has this been something you have been considering for some time.

Joshua Levine

I think it is inappropriate to provide any additional color on that last question. Again, let me go back to the first part of your question for the statement you made which is, at the end of the day, if you look at my track record and the businesses that I have managed, I have a very, very strong commercial orientation and I have a pretty strong track record of building shareholder value in the businesses that I have been in.

I am a believer that without happy customers none of us have any job security starting with me. So no one has a bigger stake in the outcome here in terms of the importance and the credibility of the business and how it is going to perform going forward than I do with regards to ensuring launch excellence of these new platforms in Boston at the end of the month.

Again, while maybe from an outside view the timing is such that it looks like a short window. My experience is that my learning, while I won't be an expert come October 28 in Boston, I am going to be farther downstream than people would believe.

Raj Denhoy - Jefferies & Company

Okay, and that’s fair. Then just a last one. I apologize but you mentioned your background and your track record. It's not lost, most of these that you sold at your last two companies, anything you can comment in terms of your thoughts here around that as an outcome for this company?

Joshua Levine

My view is, I am going to put and I am going to ask everyone around me to put their heads down and work hard and build value in this business and build a sustainable growth capability in this business and that’s going to be the focus.

Operator

Thank you. Next question is from the line of Steve Beuchaw. Please go ahead, sir.

Steve Beuchaw - Morgan Stanley

First of all, Josh, welcome.

Joshua Levine

Thanks, Steve.

Steve Beuchaw - Morgan Stanley

As I am sure, you have already figured in a short time that the role that you are stepping into is a complicated one for a number of reasons, in part, because you have a very diverse customer base. You have different segments of your end markets. They have their own challenges, whether it’s U.S. healthcare reform or reimbursement, austerity in Europe and just the simple scale of need in the emerging markets.

So, of course you are new to Accuray, but you are not new to healthcare. So, given your background, can you speak to your views on these challenges? What is the company need to be doing differently to be in tune with these customers to drive the business?

Joshua Levine

It is a fair question. Let me start with the macro piece. The bottom line is that there were structural changes taking place in healthcare in the U.S. market. I don’t care whether you are a believer that we will be operating under Obama care going forward or Mitt Romney care going forward, or whatever form of healthcare reform you think we will operate under, the reality is the changes that are taking place, Steve, are structural changes and I think its unlikely that we will going back to what we had in the past from an experience standpoint.

I think that that essentially implies for any and all players in med-tech, med device and the other segments or sectors of healthcare that you better be doing something as a primary course of your business model or your messaging to the market place. You better be doing something to either treating patients more effectively from a clinical interface standpoint or doing those things more cost effectively or limiting side effects or morbidity or things that unexpected clinical outcomes in whatever primary product or service or therapy you are delivering or some combination of all of those things.

I think if you look at that, the other thing that’s implied is the importance of data in the support of those activities is going to be critical. I think we have seen it evolving over time. I think it is accelerating now and I subscribe to the theory that, In God We Trust, All Others Bring Data.

I think the market and payers that we will deal with going forward are going to demand that. So I think those are things, again, whether that’s Accuray or any other company in the space or in healthcare in general in the U.S. and likely North American market that really is going to be an absolute mandate for you, if you want to have a seat at the table, so to speak, going forward.

If you don’t have those capabilities you have a very likelihood that you could end up marginalized, longer term. You talked about Europe. You talked about other parts of the world. The truth is, the business environment in Europe has been a challenge situation whether it’s been through sovereign debt issues or the volatility in the markets in general. I am a believer that if your primary product or service or therapy is clinically efficacious, you can position cost justification around what you are doing and back it up with the right patient outcomes clinically, then you will be better prepared and positioned to navigate through those turmoil there as well as anybody.

Again, I am not saying you can make the background or the macro environment change but the likelihood that you will be a winner in those discussions is enhanced, I think, because you will be able to answer the questions that are the key issues for the market place which is, what are you doing clinically for patients, what’s it going to cost me and is there something other than just a wing and a prayer that I can hang my hat on in believing what you are telling me, right.

So, the emerging markets whether its Asia-PAC, as a region, I think that, again when I think about Accuray and I think about all the players in healthcare, you look at growth and population, you look at new delivery sites, new construction, hospitals, free standing centers. You start to see that there are growth drivers here that cannot be ignored and shouldn’t be ignored. We just need to figure out how to take advantage and exploit them and I mean that in a very positive sense, take advantage of the opportunity that exists.

So we are going to be very market focused and I subscribe to the theory that you don’t own market share, you rent it and unless you can figure out how to really create value for customers on a sustainable basis, you won’t hold on to that market share. That has served me well, quite frankly in every business I have been attached to.

Steve Beuchaw - Morgan Stanley

Thank you. That’s quite a bit of detail. Really appreciate that. I wondered though, if we could take that as context and then think about your decision because I am sure that given your track record you had multiple opportunities. So what was it about Accuray that made you say this is the right thing for me?

Joshua Levine

If you look at my background, I am classic sales marketing, strategic marketing kind of person and bulk of my career track has been spent in commercial operations. So, really, from the very first experiences in the industry 30 years plus ago, when I started carrying a bag, its been about product, its been about how does our product differ from the competitors’ products and I think the very first thing I would answer with your question in terms of what I saw here was, this is a company with a legacy of product innovation.

This has been a company that has really forged a very unique position, I think, in their core technology. That’s good, if you are a competitor and you are a commercial person, like I am, by background, that’s a place that you really want to start. You have something that you can sell that you believe in that offers a differentiated outcome or impact if you want to describe it that way for customers.

Again, I go back to how do we create value for customers. So that’s probably the single largest piece of my answer, Steve. I think the other thing is that again just from prior experiences, I have direct experience in other small cap public companies competing in market segments or product categories where I have had success competing against larger competitors.

I have great respect for the people in this space that are larger than us but I also know that there are ways that if you are a competitor and you do the right things, I know there are ways that we will find the right path for ourselves downstream and that’s important. I believe in that. I have lived it before. So I know it.

Steve Beuchaw - Morgan Stanley

So, in your mind, this company has the necessary scale to compete?

Joshua Levine

If I didn’t think this company could compete, quite frankly, I wouldn’t have taken the job. It’s that simple.

Steve Beuchaw - Morgan Stanley

Josh, again, welcome and thank you so much.

Joshua Levine

Thank you.

Operator

Thank you. The next question is from the line of Tycho Peterson. Please go ahead.

Tycho Peterson - JP Morgan Securities

Thanks for taking the questions and sorry about the confusion before. First question, that we have had a number of people ask this. I was just wondering, on guidance, you are obviously not saying anything about guidance here. Derek, is there anything you can say to the fact that you didn’t reiterate guidance?

Derek Bertocci

Well, we are going to talk about guidance here. I think Josh has just arrived. We need to give him time to get to know the company and to make an assessment on his own and then decide where we go from there.

Tycho Peterson - JP Morgan Securities

Then, I guess, Josh, your thoughts on the role here. Any sense as to whether you will take a broader strategic overview? We have had some people ask whether maybe you would do a portfolio review. Can you comment on whether you are committed to both the Tomo and the Accuray sides of the business and how you think about just doing a strategic review? Is there a time period which you would come out to us with a broader strategic plan, I guess, is the real question?

Joshua Levine

Yes, that’s a fair question. Again, in my experience with other of these types of transition examples in my career, Tycho, generally I kind of look at a 100 day plan where in essence there will be wall-to-wall immersion for me in everything that walks, talks, squeaks, rattles, that’s important to this business. And it’s not going to be just an internal discussion quite frankly. I am going to spend an enormous amount of time out in the market place with the customers over the course of the next 100 days.

Quite frankly, my guess is, if we do a fast forward and 100 days from now, you do took an inventory of where I have spent my time, I think the vast majority of it, a disproportionate amount of it will be externally focused. I think there is a lot that I need to learn and again can accelerate my learning curve through, obviously, with interaction with the team internally here but I am really interested in understanding what customers think we need to do to create value for them in their clinical and business situations.

So those are the things, I think, from an activity and a practical planning standpoint is what you can expect.

Tycho Peterson - JP Morgan Securities

Given that you are in an environment with two large entrenched competitors, is there anything that you can just say off the bat as to how you might compete differently maybe, going forward with regards to either marketing or pricing or product cadence? Just given the market dynamics is there anything you can add, obviously you haven’t been in the role that long but just curious as to whether there is any change in go to market strategy here, if you will?

Joshua Levine

It’s an interesting question but the simple answer is, no, I can’t. I am not trying to be sarcastic. Again, it’s inappropriate for me today to do two things. One, to telegraph anything that I would or wouldn’t do to competitors or with competitors in a space like this, number one.

More importantly, I have a learning curve that I need to go through and it’s important in order to get to the right outcome here that I take the time to do that before I draw any instant conclusions. Again, I am going to rely on my colleagues here. I am going to rely on input from the market place and at the appropriate time, we will be more expansive about what that sounds like and looks like.

Tycho Peterson - JP Morgan Securities

Okay, and then last one, given the questions you got earlier, on the timing of the announcement. Anything you can say on how long this process took? Was this a relatively short process? I am just curious as to whether this has been going for a while.

Joshua Levine

Look, I am not sure that the color or details on that is germane at this point. Again, I think the important thing is that if you look at again what the press release said this morning which is the company is really embarking on its next phase of growth and in its lifecycle and its evolution.

If you look at what is happening later this month at ASTRO, it really becomes critically important, quite frankly, to have, if you are going to make a change to bring someone in on the front side of that from a timing perspective. So that really is what this was about.

Tycho Peterson - JP Morgan Securities

Okay, thank you very much.

Operator

I would now like to turn the call over to Mr. Josh Levine for closing remarks.

Joshua Levine

Thank you for joining us on this morning’s call, everyone. I want to take a moment to acknowledge all of the Accuray employees globally for their continued dedication to the company’s success and to our continued focus on improving the lives of the patients that we treat, worldwide. I look forward to speaking with the people on this call with you at ASTRO on Monday, October 29. So thank you again for tying in this morning and we look forward to seeing you in Boston.

Operator

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a good day. Thank you.

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